Planning for the Future
Posted: February 4, 2015
Whether considering wearable technology or business economics, the key requirement for successful innovation is predicting how the future will unfold. There are many different methodologies for planning and predicting the future. Two commonly used are traditional forecasting and scenario planning.
Traditional Forecasting attempts to predict the most likely future by using a forecasting model. Planners typically use mathematical extrapolation and mental extrapolation, utilizing the variables in the forecasting model to predict the likeliest scenario. There are several flaws in this approach. One is that it makes the assumption that nothing other than variables specified in the forecasting model will change. The use of historical data for variables in the model implies that tomorrow’s future will be nothing more than a variation of today (Wade, 2012, pp. 8-10). There is no single right projection that can be deduced from past data and behavior (Wack, 1985). One-dimensional traditional planning will fall short if the future deviates from the prediction and the planners do not have a response prepared for the unexpected and unpredicted future.
Scenario Planning’s methodology takes a different approach. Rather than trying to predict the single most likely scenario, it offers a range of alternate futures depending on how developments underway today unfold over time (Wade, 2012, p. 10).
This type of planning process requires a shift from mere extrapolation of forecast model variables. Planners frame the specific challenge to forecast, and then gather information and identify the driving forces that may result in significant change in the future This allows planners to identify point of uncertainty before generating possible scenarios and identifying appropriate responses to those scenarios (Wade, 2012, pp. 20-55).
Although scenario planning can be a more time consuming process than traditional forecasting, it allows for more flexibility. A chief advantage over traditional forecasting is that it supports planning and mitigation strategies for a range of futures.
Wack, P. (1985) Scenarios: Uncharted Waters Ahead. Harvard Business Review 63, no. 5.
Wade, W. Scenario planning: a field guide to the future. John Wiley & Sons, 2012..
Wade, W. (2014, May 21). “Scenario Planning” – Thinking Differently about Future Innovation. Retrieved February 2, 2105, from http://e.globis.jp/article/000363.html.
World Association of Newspapers Scenario Planning. (n.d.). Retrieved February 2, 2015, from http://personalexpertsystem.blogspot.com/2013/08/world-association-of-newspapers.html